FTC Meets Companies Over Concerns About Dominance of Google’s Android

By Jack Nicas and Brent Kendall

Federal Trade Commission staffers have met with companies in recent months to examine industry concerns that Alphabet Inc.’s Google abuses the dominance of its Android smartphone software, extending a probe that began last year, according to people familiar with the matter.

The FTC is examining issues similar to European regulators, who last week charged Google with improperly using Android’s status as the world’s most popular smartphone operating system to force device makers and wireless carriers to favor Google’s search engine and other services. Indeed, the FTC is hoping to access some of the evidence behind European regulators’ case, one person said.

Google and the FTC declined to comment.

The FTC began looking at Android last year amid complaints from app developers and other tech firms that Google flexes its Android muscles unfairly. FTC staffers have recently met with and requested data from at least two companies, these people said, a signal the probe is progressing and the commission is gathering additional information.

The investigation isn’t necessarily a sign the FTC believes Google has done anything improper. Commission investigators have reached no conclusions, and it is too early to say whether the probe could lead to legal action, people familiar with the matter said.

There are several reasons why the FTC could reach different conclusions than regulators in Europe. For one, Europe’s competition laws give antitrust enforcers more power to take action against dominant companies. Moreover, Android has greater market share in Europe, running more than 70% of the smartphones in four of the five largest European Union countries. In the U.S., Android runs 59% of smartphones, according to research firm Kantar Worldpanel. Also, U.S. law would encourage the FTC to give Google credit if its actions had legitimate business justifications and improved experiences for Android users, even if the conduct impeded rival firms.

That is what happened in 2013, when the FTC decided not to sue Google after a lengthy probe into whether the company abused its dominant market position in Internet search.

In that investigation, FTC competition staffers found that Google’s search results favored its own products and services, but they recommended against filing a broad lawsuit because of legal hurdles and Google’s “strong procompetitive justifications” for its actions. Those staffers did recommend the FTC challenge other aspects of Google’s conduct, including its alleged use of content from rival websites, but the commission accepted some voluntary commitments from Google instead.

Android questions also are attracting attention on Capitol Hill. In March, Sen. Orrin Hatch (R., Utah) asked FTC Chairwoman Edith Ramirez whether the U.S. was investigating European regulators’ concerns about Android. In a written response released this month, Ms. Ramirez said, “While I cannot discuss the existence of nonpublic investigations, I can assure you that I am aware of these concerns.”

The EU alleged last week that several of Google’s Android policies are anticompetitive, including a practice of requiring Google to be the default search engine on any smartphone that has access to its Play Store, which offers more than one million apps.

In response, Google said that including its apps and services on Android devices helps it improve Android software and provide it free to phone makers. The business model “keeps manufacturers’ costs low and their flexibility high,” the company said in a blog post.

Canadian regulators said last week Google didn’t violate their competition laws, after a multiyear probe in which they consulted the FTC and European regulators. Canadian regulators said users can, and do, change their smartphones’ default search engine if they prefer a different one.

News Corp, which owns The Wall Street Journal, has filed a separate complaint in Europe that Google unfairly copies news publishers’ content and makes it available in search results. Google has said in response, “Google News and Search send billions of clicks for free to the websites of news publishers.”

Write to Jack Nicas at jack.nicas@wsj.com and Brent Kendall at brent.kendall@wsj.com

Breaking the story

Jack Nicas and Brent Kendall were first with the news the U.S. competition regulator has has met with and requested information from companies in recent months to examine industry concerns that Google abuses the dominance of its Android smartphone software.

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